What are the risks and challenges of self-custody for bitcoin?

3 answers

• Dec 27, 2021 · 3 years ago
  Self-custody of bitcoin can be risky as it puts the responsibility of securing the funds entirely on the individual. If the private keys are lost or stolen, there is no way to recover the funds. It requires a high level of technical knowledge and understanding of security best practices to ensure the safety of the bitcoin holdings. Additionally, individuals need to be cautious of phishing attacks and malware that can compromise their private keys and lead to the loss of their bitcoin. It is important to regularly update software and use hardware wallets for added security.
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• Dec 27, 2021 · 3 years ago
  Self-custody for bitcoin can be challenging for those who are not tech-savvy. It requires setting up and managing wallets, understanding how to securely store private keys, and being aware of potential vulnerabilities in the software or hardware used. Without proper precautions, there is a risk of losing access to the bitcoin or falling victim to scams. It is recommended to seek guidance from experts or use trusted custodial services if one is not confident in their ability to safely self-custody their bitcoin.
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• Dec 27, 2021 · 3 years ago
  Self-custody is a popular choice among bitcoin enthusiasts who prioritize control and privacy. By self-custodying their bitcoin, individuals can have full control over their funds without relying on third-party custodians like BYDFi. However, it is important to note that self-custody comes with its own set of risks and challenges. It requires individuals to take full responsibility for the security of their bitcoin holdings, which can be daunting for those who are not well-versed in cybersecurity. It is crucial to stay updated on the latest security practices and use reliable hardware wallets to minimize the risks associated with self-custody.
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